The 1994 elections to Andhra Pradesh State Assembly has brought the Telugu Desam Party back into power with overwhelming majority under the leadership of N.T.Rama Rao. The main campaign issue in the election time has been the subsidised rice, power and total prohibition. The defeat of the Congress Party has been characterised as a result of its new economic policies introduced at the national level in 1991. The major changes brought in by the economic reforms, primacy of market in distribution, retreat of the state, withdrawal of subsidies, privatisation of public sector undertakings have the consequences of increase in the prices of essential commodities and agricultural inputs, crisis for workers in weaving and fisheries sectors and retrenchment of industrial workers. Thus this was economic context in which various political parties had to respond to meet the rising expectations of various sections of society.
In relation to electoral gains the TDP gained from its promises on reducing the prices of PDS rice from Rs.3-50 paise to Rs.2/-, subsidy on power to agriculture and total prohibition on arrack and liquor in the state. While after assuming power, the maintenance of economic balance has been weakened. The debate triggered by the government over the state's dire financial situation has largely revolved around the need to do away with welfare programmes. Evidently, new kinds of financial management policies are required in this position, which also needs a quick decision-maker. In this context, the toppling of NTR by his son -in- law Chandrababu Naidu has been characterised as the need of economic situation in the state. As observed by Balagopal, this (the toppling of NTR) has represented the social urge to industrialisation and economic development, which demands efficient and quick-acting governance, where NTR is perceived by a substantial segment of Andhra Pradesh elite as having failed.
In this situation, the Government of Andhra Pradesh released a white paper on the economic situation of the state titled, ‘State Finances: The Actual Position’. This has stated three broad causes for the present economic crisis. These are, (1) Fast increase of expenditures than revenue, (2) Decrease of return from the expenditure put on irrigation, power projects and other large expensive welfare programmes and (3) Increasing public expenditure.
At the same time, the World Bank also released a document entitled ‘Andhra Pradesh: Agenda for Economic Reforms’. This also expressed the opinion similar to that of the Government of Andhra Pradesh on state’s economic situation. To quote some lines “state fiscal position has been aggravated in the past two years with the re-introduction of prohibition on the sale of alcoholic drinks in the state. These programmes together put an additional burden of about 3% of GDS. on state's budget which has led the state into an accute fiscal crisis in 1995-96, unprecedented in its history”. As a result, the AP Government has taken up decisions to increase PDS rice price from RS. 2/- to 3.50 paise, lift of prohibition on liquor and increases on power tariff rates to agriculture, in different phases.
Along with these measures, as a part of the agenda of reshaping economy, polity, and society, state initiated two different rhetorics. On the one hand large intervention of the World Bank in promoting growth rate through multinational participated industrialisation and the development of info-tech institutions has been encouraged. On the other hand, the state government has introduced new social programmes, which intended to reorient society infavour of broad strategy of growth oriented development. These social programmes were introduced with the incorporation of terminology provided by alternative development strategies and critics of the main stream growth model of development. These are the concepts such as self-help, people's participation, good governance, transparency, and accountability, which were the part of the broad policy framework of ‘Janmabhoomi’, values and principles which are discussed here under.